HELP! I own a house in San Diego which currently is not being rented out right now because the property manager is preparing the house for rental.
I went ahead and made an offer on a 2nd house. I obtained a preapproval letter from a mortgage broker based on my income. My income was enough to pay for both mortgages at the same time.
Last week the mortgage company said that because I had so many deductions on my 2004 taxes, I will need proof that the house is currently being rented in order to obtain the loan. I cannot get proof of a lease yet because the house is not ready for rental. As a result, they refused to give me a loan.
The contract for the second house was contingent on me obtaining financing. The sellers agent was pissed that I was not able to obtain the loan and threatened to sue based on the fact that I knew all along my San Diego house was not being rented out. I NEVER tried hiding the fact that the San Diego house was currently not being rented out and I do not think my preapproval loan application ever asked me how much the San Diego house was being rented out for in the past, it only asked for my salary at my current job.
I do not think he has a case because I dont think I ever included my rental income as my regular income in my preapproval letter. This only became an issue with the mortgage lender after they saw I took a lot of deductions in my 2004 taxes.
Does the sellers agent or sellers have a case against me?
That agent is full of crap, and trying to scare you!
But dont worry, he has got nothing on you. Read Sec 2 I on page 1 of your C.A.R Purchase agreement. It explains it all there. If you cant remove your loan contingency the agreement is simply cancelled. They cant sue you its absolutely ridiculous!!
He’s trying to palm the sellers stress down the line onto you!
PS. What is your agent doing??? He should be advising you here. If he doesnt know then tell him to find out… he’s not representing you very well!
yes the contract said that the sale of the house was contingent on me obtaining 80% financing at a rate of no more than 6.5%. I have a signed letter from my mortgage broker stating that the loan was denied because of “insufficient income”. I faxed this to him 4 hours before the deadline.
The sellers agents argument is that I tried hiding the fact that my San Diego house is not being rented out which is absolutely untrue. Both my realtor and my mortgage broker knew the situation with my san diego house.
This is a little dirty - But - If the Realtor keeps pushing the issue, have one of your friends call her and tell her they are from the local news station. They are doing a public interest story on Joe Blow (you) because a Realtor is suing over a deal gone bad.
Spotlights generally make rats return to their holes…
on top of what other have said (which is they have no case), they would have to prove damages. I know a few people that have tried to start these kind of lawsuits and the lawyers usually ask for $10k or $20k retainer to get started.
whether your house in SD is rented or not not germane to the situation.
If they continue to hassle you, I would tell the realtor you are going to report them ot the state license board and better business bureau. As an intermediate step, you might call the realtor’s office and ask to speak to the broker or office manager. From that point on, I would not communicate with them
The selling agent may not be trying to scare you, they could honestly believe you tried to hide something. Regardless, they’d have to prove your deceit and it seems as if your contract is straightforward about the financing contingency.
Perhaps you can ask for second mortgage broker’s opinion. It may be true that you can’t qualify if you don’t have enough income AND your mortgage officer was counting rental income towards your debt to income ratio. Maybe another lender or private investor will have more flexible qualifying ratios.